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Last week, when I wrote that airlines would take a hammering in the wake of the World Trade Centre and Pentagon atrocities, I didn’t anticipate that events would move so quickly.

As I wrote, Continental Airlines has announced a 20 per cent cut in capacity – by the end of the week, all of its major competitors had joined in the emergency rationalisation.

This week, British Airways is announcing details of cuts to its schedule and route network, following last week’s decision to cut its capacity by ten per cent and axe a further 5,200 jobs, bringing its total lay-offs for this month to about 7,000.

The airlines are emblematic of the world crisis triggered by the terrorist attacks. Not only were they the chosen medium for the assault on Western capitalism, but their collapse is the most readily identifiable symptom of the recession that has arrived in the US and is coming in Europe.

But it is right to question whether the rapid rationalisation of the air travel market is a direct result of the terrorist attack on the US. I have no doubt that empty planes and cancelled bookings since the fatal hijackings have had a negative effect on the airline trade. But the sheer speed with which capacities were cut and redundancy programmes implemented would suggest that this was an industry already facing severe contraction. The atrocities merely hastened it.

WPP Group chairman Sir Martin Sorrell had it about right on the BBC’s Today programme last week, when he said that all the indications were there of the markets entering recession before the attacks. The recession is simply attracting more attention as a result of the attacks.

Sorrell faces his own challenges now that the French marketing services group Havas has walked away from its bid for UK media buyer Tempus, in which WPP holds a 25 per cent stake and for which it was a contested bidder. With Tempus shares tumbling well below the value of WPP’s 555p-per-share offer, WPP might wish it could withdraw.

No matter – WPP was always a strategic shareholder in Tempus, albeit one whose stake has turned out to have been expensive for the time being. But WPP will continue to hold a strategic stake until value returns.

Elsewhere, we can anticipate institutional investors buying into value now that the US equity market has finally recognised that it was still hopelessly over-valued after the telecoms and Internet hyper-inflation of the late-Nineties. The closure of Wall Street for well-nigh a week and the concentrated crises in the insurance and airline industries may have exacerbated the correction, but they weren’t the causes of it.

This is what has led commentators to a consensus that this recession will be nasty, brutish and short and will affect the US markets – which were more heavily over-rated – more severely than European markets – which are fundamentally in better shape. The markets will learn to buy value again, after the growth-stock obsessions of recent years, and all will be well.

To this I would add that equities markets on both sides of the Atlantic continue to be politicised. By this I mean that the terrorist attacks cannot be allowed to have succeeded in striking a significant blow against the machinations of Western capitalism. Central banks will consequently intervene to support them in a manner that would have been absent in free markets otherwise.

The Dow Jones index may have collapsed to levels not seen since 1933, but the Federal Reserve’s cut of half a per cent in the wake of the atrocities, and the indications by the Bank of England’s Sir Eddie George that he will be following suit, indicate that markets won’t be left entirely to find their natural levels.

All this would seem to support what Lord Rees-Mogg calls “buoyant pessimism” and, distasteful though it is to articulate it, makes the prospects for a short recession in the markets better than if the atrocities had not occurred.

Except in one regard. Now that the initial numbing shock of the attacks has begun to wear off, I wonder about the degree to which Europe will be prepared to share the economic burden of the US.

For right or wrong, prime minister Tony Blair threw in unequivocal UK support for the US.

But, there is no indication that the rest of Europe feels so unconditionally supportive. For its part, the US – which has never had a very firm grasp on how it is seen from abroad – is probably over-sanguine in expecting the “civilised” world to tolerate whatever it takes to see it back on its feet.

As rational thought returns to the markets, The US may be in for a nasty surprise. President George Bush has signed a $15bn (£10.2bn) aid package for American airlines. With the likes of BA and Germany’s Lufthansa on their knees, we can expect prompt anti-trust challenges if such subsidies are used to maintain critical transatlantic routes at European airlines’ expense.

Likewise commercial resentment may arise, when Europe has to pick up much of the $40bn (£27.2bn) insurance tab, in the shape of increased premiums, for previously relaxed, if not lax, US security.

As reality returns to markets, the airlines may not be alone in reminding the Americans that the freedoms they are embarking on a war to protect, are as applicable to free markets as they are to free societies.

George Pitcher is a partner of issues management consultancy Luther Pendragon

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